Property market, safe as houses
- Thread starter BV
- Start date
Intrinsic value is in no way determined by price movements or government policies which distort the natural underlying value.
Intrinsic value is just that: the underlying intrinsic or economic value of the asset.
How does one accurately value intrinsic value of residential property: buggered if i know
hobo
What are you doing here?
I thought you would have followed the steps of the other permabear Bluestorm and left this forum....
I take your point but look mate, I don't take much notice of these charts when they show movement on the way up or down because as we both know they are not representative of all markets and property types.
For example, the lower end in Sydney's western suburbs and some regional areas will show growth this year and will probably keep on growing because properties there are affordable and because interest rates are likely to stay around current levels for a long while.
I actually find it interesting to see how the upper end is coming down and the lower end is coming up so we end up with a flatter price curve across Sydney. I wonder if your chart will pickup such a movement. Probably not.
What are you doing here?
I thought you would have followed the steps of the other permabear Bluestorm and left this forum....
I take your point but look mate, I don't take much notice of these charts when they show movement on the way up or down because as we both know they are not representative of all markets and property types.
For example, the lower end in Sydney's western suburbs and some regional areas will show growth this year and will probably keep on growing because properties there are affordable and because interest rates are likely to stay around current levels for a long while.
I actually find it interesting to see how the upper end is coming down and the lower end is coming up so we end up with a flatter price curve across Sydney. I wonder if your chart will pickup such a movement. Probably not.
Intrinsic_Value;783697 How does one accurately value intrinsic value of residential property: buggered if i know:p[/QUOTE said:
I can't really trust an article which is immediately followed by ads for properties for sale.
These sort of articles are great by when written by someone with a vested interest in property you have to take it with a grain of salt.
I remember back before the GFC, I was at a fund manager lunch of some big Australian hedge fund.
He stood up and for an hour and listed how great the world economy was, all the reasons why the market would continue to go up, china, oil, the resource boom etc etc. and "if" and that was a big "IF" the market was to fall it would be a minor fall or a period of stagnate growth, nothing to worry about, supply and demand blah blah blah.
He was an "expert" and boy did he and every other expert out there get it wrong.
These sort of articles are great by when written by someone with a vested interest in property you have to take it with a grain of salt.
I remember back before the GFC, I was at a fund manager lunch of some big Australian hedge fund.
He stood up and for an hour and listed how great the world economy was, all the reasons why the market would continue to go up, china, oil, the resource boom etc etc. and "if" and that was a big "IF" the market was to fall it would be a minor fall or a period of stagnate growth, nothing to worry about, supply and demand blah blah blah.
He was an "expert" and boy did he and every other expert out there get it wrong.
lol just read through some of the comments. Classic.
I wonder if this doctor can be held accountable legally if he screws his patients (e.g. by convincing them to buy at the peak)??
jusy is still deliberating over here.....
rent is the best way to determine value of resi (particulalry if no develop potential or other factor that would vaue it higher). so if it rents for $300pw and your risk and return requirement is 10%, then $300x52 = $15,600 less say 20% holding costs = $12,480, then the house is worth $125k. anything higher than that is market sentiment and distortion.
Do you have evidence the lower end is moving up? Thats crazy talk man.
I don't have any charts as such
My comment was based on the fact that stock moves and that the next sale in the same complex is higher and not lower
i sense a change in the tide, there, John....!
my tide changed long ago - check out my signature! This forum is split by those who thinks it's business as usual and those that think we have come to the end of a longer cycle. Personally I think everything has changed. Yes property may go up but what good is that if the holding costs kill you? We now enter the decline of the American empire (won't happen overnight and they are still the solo super power) and all the implications from that. Then on a micro level there is me paddling my canoe, just trying to make sure I have enough water and sunscreen onboard and trying to find the patch of water that looks the calmest. Whilst I enjoy the paddle the conditions are changing and I am staying closer to shore and taking up a new hobby as well.
My back up scenario? Well if property takes off and you are CF+, then you win. If property does nothing, well it can just sit there and deflate the debt, then you win.
My strategy relies upon the second. If it does the first, party time.
That sounds pretty spot on Ausprop.
I doesn't seem to hold with a lot of the property I have come into contact with, in and around Sydney, but I am assuming there are plenty of areas around Australia where those figures would apply?
well perhaps if you lower your expected ROR and discount it abit for the effect of deflation of your debt (leveraged savings it could be termed??) - you may find something. I believe over east you can get 7% yields gross. I doubt you will find much but if you have a high income you can take a sick property on board and use your tax deductions to help, but there's only so many sick ones you can afford to keep
Safe as houses? Did you see those houses blown up in QLD?
Those figures are crazy.
many many markets around Australia would have $300 per week average rent but few would have values of around $125,000. Cant build a house for that anymore. Then add finishes etc etc. only thing that could move in that equation would be the rents so rents must go up to in order for it to make sense. Up i say up up up
Similar threads
